Regional Industrial Development Necessary to Support "Affluent Life"

How are regional revitalization endeavors, as well as and customer awareness and needs, changing? How are visions co-created by various stakeholders? Fujitsu Research Institute (FRI) consultants sat down with a local government official from Tottori prefecture and talked about the regional industrial development necessary to support the affluence of residents. (Interview date: July 31, 2017)

Participants (from the left)
Seiji Takahashi, Principal Consultant, FRI
Nozomi Morita: Consultant, FRI
Koji Adachi: Deputy Section Manager, Environment-oriented Prefecture Promotion Section, Living and Environment Department, Tottori Prefectural Government
Sayaka Kawaguchi: Senior Consultant, FRI
Kazuko Sakurada: Managing Consultant, FRI

* This article was published in Chisounomori 2017, volume 17 (pp. 11-17). Chisounomori is an information magazine published by Fujitsu Research Institute (FRI).
* The titles of individual participants are correct at the time of Chisounomori's publication.

Key is: "Why Do You Invite People to Your Region?"

――The environment surrounding endeavors to revitalize Japan's regional areas is changing. The indicators for measuring policy success used to be the number of visitors to an event, for example. But nowadays we need to work with so-called outcome indicators, which evaluate the results and value of attracting visitors, and progress is managed more closely. Planning an event now requires people from different sections getting together and exchanging opinions or working in tandem with consultants. How do you feel about local governments' efforts to revitalize their regions, and changes in customer awareness and needs?

Kazuko Sakurada
FRI
Managing Consultant, Public Management Consulting Group

Sakurada: People used to talk about regional revitalization in terms of the methodology of "how to attract a lot of visitors," such as installing an information board/map and holding an event. Instead, we start by involving younger people in the area, who are the next generation's leaders, and those who moved to the region, and considering basic questions like "Why do you invite people to the region?" "What outcome do you wish to achieve?" "What do you need to do to achieve it?" and "What resources are you able to use in the region?"
For example, Shiriuchi Town in Hokkaido, a small, aging marginal village on the coast, has been applying tourism to attract inbound migration and build infrastructure that facilitates a comfortable lifestyle. Specific initiatives include promoting trial living using vacant houses to attract settlers and renovating an old elementary school building on a hill into reception/lodging for climbers that doubles as a tsunami disaster prevention center. I think it's time to consider what economic and social benefits a certain initiative will bring to people in the region, not merely the aim to pull in 10 million tourists.

―― I think that in Ideathon (*), it's important to consider "for what purpose." Ms. Kawaguchi, you're involved in Ideathon in Kochi and Niigata. Could you tell us your opinion on this?

Sayaka Kawaguchi
FRI
Senior Consultant, Manufacturing Industry Consulting Group

Kawaguchi: We, too, emphasize the questions "What do we want to accomplish?" and "What's happening now?", including whether Ideathon is a good fit for the purpose. I've noticed that when creating a new service using local resources, for example, more and more municipalities wish to develop local creative talents and relationships between them and instill in their regions "a culture." This is where residents themselves spontaneously come up with events instead of relying on the municipalities to set them up.

――Ms. Morita, you've been involved in Satsumasendai City's regional revitalization project for a while. Would you talk about changes in the environment and issue awareness?

Nozomi Morita
FRI
Consultant, Cross-Industry Business Planning Group

Morita: I've been helping with a project to develop regional industry in Satsumasendai City that takes advantage of its local resource, bamboo. When launched two years ago, the project was chosen as one of 50 selected regional revitalization projects and attracted a lot of attention. Lately, however, the project has been receiving negative reviews. In this project, the Satsumasendai City Bamboo Biomass Industrial City Conference (**) was established through a collaboration among industry, academia, government and finance. A network of businesses and related organizations from within and without the city is being formed. Today we are required to deliver outcomes from the network, such as creating business and employment, and increasing the residents' income.

Tottori Prefecture Aims to Achieve User-oriented "Hydrogen-based Living"

――One of the ideal states of a city is "affluence" for residents and prospective settlers, and achieving it requires policy measures to fill the gap between the ideal state and real challenges. Tottori Prefecture is one place that has been working on realizing a hydrogen-based society to attain an affluent life for its residents.

Adachi: In Tottori Prefecture, we talked with an automobile manufacturer and a house builder for about a year and created a vision that focuses on hydrogen. There is plenty of talk about a "hydrogen-based society," but I don't think that the national government has clearly defined it yet. At the vision review meetings, we have discussed the ultimate questions: "Why hydrogen?" and "Why do we have to change our energy policy?" It's difficult to clearly describe a "hydrogen-based society," including energy supply chain. So in this light, we decided to create a vision of hydrogen by considering what "affluence" should mean for the residents of Tottori Prefecture. As the important thing is to make the initiative user-oriented, we call it "hydrogen-based living" instead of "hydrogen-based society." (Figure 1)

Figure 1: Tottori Prefecture's "Hydrogen-based Living" Vision

Life and energy consumption in cold-weather regions are different from those in other areas. When thinking about Tottori's weather conditions, the best way to apply current technology is hydrogen-based living. Energy powers the basis of living, and industrial development is built on it. We need to hold the perspective that it's impossible to talk about the whole picture without considering the individual household, which is the smallest unit. Otherwise we cannot formulate a plan for a region, never mind Japan as a whole. We considered future hydrogen-based living and created a demonstration center called Tottori Hydrogen Manabium (***). Tottori Prefecture is the first to build a hydrogen-producing equipment and a smart house that's entirely run by hydrogen. This smart house is powered exclusively by genuine hydrogen, and is designed to demonstrate the benefits and challenges of energy in a way that anyone with a fourth-grade level of education can understand (Figure 2).

Figure 2: Image of Tottori Hydrogen Manabium
Koji Adachi
Deputy Section Manager in charge of next-generation automobile promotion, Environment-oriented Prefecture Promotion Section
Living and Environment Department, Tottori Prefectural Government

Since this kind of project can't be implemented by local small and medium-sized businesses alone, we reach out to large companies for collaboration. Tottori Gas has acquired knowledge and technology of hydrogen through collaboration with an automobile manufacturer and a house builder. In this way, local players can operate hydrogen stations without needing to invite a large company from Tokyo. They can play an active part, and the regional economy will grow.

Kawaguchi: Large companies come to talk to us about their future business. Many of them are thinking of making regional contribution. In addition to imparting their technologies or using their sales channels, it's important for them to help a new industry to take root in the region and embrace local talent. How do you think a local government should team up with businesses that come from other regions?

Adachi: We welcome big companies. Because they have an established reputation, local businesses are happy to have them in the region. We have worked with a large company on a next-generation automobile project. While we were considering a public relations campaign against global warming, the new trend of hydrogen emerged, so we started talking about a hydrogen-powered house. Hydrogen was just a tool here; our real objective was to demonstrate the ultimate energy-saving home and living. It took us two years to persuade the automobile manufacturer to cooperate with the house builder. We encountered many difficulties. But we took everything into account and convinced the company that the end goal was to bring affluence to Tottori residents.

Sakurada: You involved businesses while understanding their various interests. I think you made this vision possible.

――The same thing is asked of consultants. Until now we have only needed to follow specifications and produce outputs accordingly. Lately, though, while working with customers there's been an increasing number of jobs requiring us to solve complex problems through trial and error that may have no solution. We talk to various stakeholders and provide information that can benefit them in forging stronger relationships. What we need is communication capability in a broad sense.

Morita: Satsumasendai City formulated the next-generation energy vision and is working on various projects. In the brochure there are pictures that kids drew about their images of an ideal future Satsumasendai City. Many kids use green and blue, which makes me think they view the city as having a rich natural environment and using energy efficiently.
I agree that collaboration between major companies and local businesses develops human resources. In Satsumasendai City, a team consisting of local and Tokyo-based companies, a university, and a financial institution is working to achieve a low-carbon society using a new material called cellulose nanofiber made from bamboo (photo). I hope such projects will increase demand and added value for bamboo, and in turn, increase the income and employment in the forestry industry.

Cellulose Nanofiber (the bottles in front)

Developing People and Culture in the Region

――To achieve the desired state of a region, it is expected that the role of government and consultants who support it will become increasingly sophisticated. I would like Mr. Adachi to tell us what he expects from us consultants.

Adachi: One of them is to be perceptive to the nation's systems and Kasumigaseki's movements. Another one is the ability to make proposals. For example, any proposal for regional revitalization requires the information from the related national budget at the bare minimum. In some cases, in order to spread certain technologies, Japanese industries use think tanks behind the scenes to sell them to local governments. However, some proposals are unrealistic in terms of budget size or are clearly a rehash of another city's plan. A proposal should be made based on the actual financial conditions of the local government or economy. It needs to be about a unique service the region can offer and contributes to regional revitalization.

――How should we consultants respond to such requests?

Sakurada: Different regions have their own individual characteristics and different needs. At least we must understand these conditions when making a proposal. We should look ten years into the future and consider whether the technology will be sustainable in the region and what scheme will be necessary to make it sustainable.

Kawaguchi: It goes without saying that when making a proposal, we must visit the actual region and get to know the place. Then the first step of a proposal is to convince people in the local government like Mr. Adachi that they would benefit from working with us consultants. Unless it develops people and culture in the region, a new industry or a tourism idea will not take root, even though it may look successful on the surface. Therefore, I'd like to cherish the hearts and minds of local people.

Morita: When proposing a solution, I'd like to recognize the current state, resources, strengths and weaknesses, and ideal future state of the region as well as what makes the people living or working there happy. I'd like to be able to create a solution gradually through discussions and trial and error with collaborators.

[Moderator] Seiji Takahashi
FRI
Principal Consultant
Cross-Industry Business Planning Group

――Because there is no one correct answer, it may be a good idea to try different ways and co-create with customers and stakeholders. We will forge relationships with administrative officers as co-creation partners to build a network, and move forward with shared awareness of the issues. It's our hope to develop talents and systems mutually through discussions and projects. Thank you very much for your participation today.

  • (*)Ideathon: A coined word that combines "idea" and "marathon." It is a workshop-style event in which people with an interest in the same theme get together, brainstorm, and arrive at a conclusion.
  • (**)Satsumasendai City Bamboo Biomass Industrial City Conference: A wide range of businesses and related organizations from within and without the city participate in the conference. The number of members is 95 as of August 30, 2017.
  • (***)Tottori Hydrogen Manabium: A center for hydrogen energy demonstration and environmental education established by Tottori Prefecture. The facility is built based on an agreement signed by Tottori Prefecture and three companies (Tottori Gas, Sekisui House and Honda Motor Company) on January 25, 2016. The agreement promotes a Tottori Prefecture project to establish a center for demonstrating hydrogen energy, with the goal to prevent global warming and create a sustainable, low-carbon society.